Emerging Markets Rates and Currencies Handbook

The PHP fix is a weighted average spot rate of the morning’s trades in the onshore spot market done from 9.00am to 11.30am Manila time, one day before value date as reported by the Bankers Association of the Philippines and published on Bloomberg as PHFRRATE Index. To trade off the fix value, orders must be passed before 8.30am (Manila time) on the prior day. For example to trade off the fix value 5 April, orders must be passed before 8.30am (Manila time) on 4 April. Regulation Offshore Restrictions: Resident corporates in the Philippines can access the offshore market. Non-Resident Restrictions: Non-resident PHP accounts shall be funded only by: a. peso proceeds from conversion of inward remittances of convertible FX; b. peso receipts of non-residents from, or peso sales proceeds of: (i) BSP-registered inward investments; and (ii) properties in the Philippines allowed to be owned by non-residents under existing laws; c. onshore peso receipts of non-residents from residents for: (i) services rendered by non-residents to residents; and (ii) trade transactions,; d. peso receipts of expatriates working in the Philippines for less than one (1) year representing salary/allowance/other benefits; e. peso funds of: (a) foreign students enrolled for at least one (1) school term in the Philippines; and (b) non- resident Filipinos; f. cash collateral used for investments under Securities Borrowing and Lending or similar arrangements; g. peso receipts of non-residents from residents for payment of private sector foreign loans/borrowings and other loan-/borrowing-related transactions that are duly approved by/ registered with/reported to the BSP (as applicable) under Section 24 of FX Manual (Private Sector Loans/Borrowings); h. peso proceeds from the onshore sale by non- resident issuers of their equity and debt securities under Section 34 of FX Manual (Inward Investments in Instruments Issued by Non-Residents); and i. peso funds returned to non-residents for excess pesos arising from unrealized investments. Non-residents may purchase foreign currency up to the amount equivalent to the balance of the peso non- resident deposit accounts that are funded by items (b) to (i) above without prior BSP approval subject to the submission of an Application to Purchase FX form and Bangko Sentral Registration Document (BSRD) for peso funds from items (b), (e), (g). To allow full conversion of Peso deposits to foreign exchange funded by item (a) , pesos must have been used onshore to fund private sector loans/borrowings which are duly approved by and/or registered with/reported to BSP in accordance with the FX Manual; and inward investments which are duly registered with the BSP or registering bank (as applicable) in accordance with the FX Manual . For funds not yet transferred to the resident investee relating to excess pesos arising from unrealized investments, non-resident may purchase FX un accordance with the FX Manual. Otherwise, prior BSP approval is required. For reasons other than those mentioned above, prior BSP approval is needed for non-residents to open a peso non-resident account and to enable the non- resident to purchase foreign currency using PHP. No approval is needed for transactions involving foreign currencies on both sides of the transaction. Requirements to open a foreign currency account Subject to submission of customary account opening documents. Deal Management Rollover: Rollover, unwinding and early maturities of deliverable forwards are permitted, subject to the submission of mark to market form, other required supporting documents and must be duly acknowledged by the counterparty of the bank. Unwinding: Rollover, unwinding and early maturities of deliverable forwards are permitted, subject to the submission of mark to market form, other required supporting documents and must be duly acknowledged by the counterparty of the bank. Early Maturity: Rollover, unwinding and early maturities of deliverable forwards are permitted, subject to the submission of mark to market form, other required supporting documents and must be duly acknowledged by the counterparty of the bank. Documentation Requirements Non-trade flows Resident corporations may purchase FCY, sell PHP for payment of non-trade transactions (other than those related to loans and investments) listed under Appendix 1 (Minimum Documentary Requirements for the Sale of Foreign Exchange Relating to Resident to Resident FX Transactions and Resident to Non-Resident Non-Trade Current Account Transactions) of the FX Manual, subject to submission of the following to the bank: - FCY purchase not exceeding USD1MM per day: duly